“30 Year Mortgage Rates Bust Thru 5%…”

Here is an option for a seller in Denver that does not see his home selling because of…

The following from Lonnie Glessner, Nova Home Loans, Highlands Ranch office:

This was the headline in a first page story in the Denver Post on Saturday as interest rates rose another ¼% last week to 5.25% according to Jerry Kaplan EVP at Cherry Creek Mortgage. However, many consumers still think rates are about 4.75% and that’s not true anymore. I know our rates are up ½% since September 7th which is equal to a 5.50% price increase on a home. Ouch! As I have said thousands of times waiting seldom pays off.

So, what’s a solution? An interest rate buydown is an option. I prefer the seller paid 2/1 Buydown in which the seller pays the interest cost at closing for the buydown. For example, the buyer’s loan amount is $350k. A normal 30 year fixed rate is now 5.25%. With a 2/1 buydown the rate would be 3.25% the first year and 4.25% the second year. Then, from year 3 to 30 the rate would be 5.25%.

On a $350k loan this would save the buyer about $410 a month for the first year and $210 a month for the second year. The total cost to the seller is about $7500 paid at closing or roughly 2.125% of the loan amount.

So, instead of dropping the price on your listing consider this option instead as a buyer’s pain is the monthly payment and your sellers can help alleviate this pain for the first 2 years.

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About Pete Doty

As a Realtor® Pete has been working in the Denver residential market since he first started in 1985, and focusing primarily in the south end of town. He finds the client the home they want, and then help them sell it when they want to move. Marketing is really where his heart is, and making sure his clients’ interests are watched over in Littleton, Highlands Ranch, Parker, Castle Rock, Centennial, Englewood, Morrison or Denver. His web site www.DenverRelocation.com ranks high in search rankings and generates numerous relocating buyers each year. Talk to Pete for a unique perspective on today's real estate market in Denver.
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